N.L.R.B. v. Kemmerer Village, Inc., s. 89-3063

• Decision Date: 16 July 1990
• Docket Number: Nos. 89-3063,89-3361,s. 89-3063
• Citation: 907 F.2d 661
• Parties: 134 L.R.R.M. (BNA) 2767, 116 Lab.Cas. P 10,251 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. KEMMERER VILLAGE, INCORPORATED, Respondent.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 661

907 F.2d 661

134 L.R.R.M. (BNA) 2767, 116 Lab.Cas. P 10,251

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. KEMMERER VILLAGE, INCORPORATED, Respondent.

Nos. 89-3063, 89-3361.

United States Court of Appeals, Seventh Circuit.

Argued June 12, 1990.

Decided July 16, 1990.

Timothy A. Bridge, Robbins, Schwartz, Nicholas, Lifton & Taylor, Chicago, Ill., for Kemmerer Village Inc.

Aileen A. Armstrong, David Seid, William A. Baudler, Howard E. Perlstein, N.L.R.B., Appellate Court--Enforcement Litigation, Washington, D.C., Joseph H. Solien, N.L.R.B., St. Louis, Mo., for N.L.R.B.

Before POSNER, EASTERBROOK, and MANION, Circuit Judges.

POSNER, Circuit Judge.

Kemmerer Village, Inc., a nonprofit corporation controlled by two presbyteries (governing bodies within the Presbyterian Church), operates a foster home in Illinois funded in large part by the Illinois Department of Children and Family Services. Kemmerer claims to be exempt from the National Labor Relations Act on three grounds: that it is a "political subdivision" of a state and hence expressly exempted by 29 U.S.C. Sec. 152(2); that it is so far controlled by the Department of Children and Family Services as to be incapable of engaging in meaningful collective bargaining, and hence should be treated as exempt under the doctrine the Labor Board announced in Res-Care, Inc., 280 N.L.R.B. 670, 674 (1986), and we discussed most recently in Staff Builders Services, Inc. v. NLRB, 879 F.2d 1484, 1486 (7th Cir.1989); and finally that it is a religious organization, whose labor relations NLRB v. Catholic Bishop, 440 U.S. 490, 99 S.Ct. 1313, 59 L.Ed.2d 533 (1979), places beyond the Labor Board's power in order to prevent the entanglement of government in religion.

Grounds 1 and 3 cannot both be right; nor 2 and 3. If Kemmerer is a political subdivision it cannot also be (outside of Scotland, anyway) a Presbyterian religious body that must be protected from becoming entangled with government. And if the government already controls Kemmerer's labor relations (ground 2), without protest from it, how can Kemmerer resist, on grounds of autonomy rooted in the First Amendment, the Labor Board's claim to share in that control?

Ground 3 in any event has no possible merit. Kemmerer is controlled by organs of the Presbyterian Church, it is true, and by tradition its director is a Presbyterian minister, who conducts occasional services for the children. But that is the end of the Presbyterian involvement. That Kemmerer is organized under Illinois's nonprofit corporation statute rather than under the state's religious corporation statute is unimportant, Pime v. Loyola University of Chicago, 803 F.2d 351, 358 (7th Cir.1986) (concurring opinion), but not the fact that Kemmerer's articles of incorporation require (no doubt to make it eligible to receive state funds) that it operate as a nonsectarian enterprise. Kemmerer does not inquire into the religion of the children whom it takes in, or seek to indoctrinate them in the tenets of the Presbyterian faith (or any other faith), or require its employees to be Presbyterians. It is true that in Catholic Bishop the union was not trying to organize priests or nuns, but instead lay employees. But those lay employees were the teachers in the archdiocese's parochial schools, and such schools have (though not exclusively) a religious mission. Kemmerer appears to have no religious mission at all and therefore cannot get even to the threshold of showing how being forced to bargain collectively with its employees could impede that mission. This case is governed by St. Elizabeth Hospital v. NLRB, 715 F.2d 1193, 1196-97 (7th Cir.1983), which holds that a hospital owned and operated by a Catholic religious order was not exempt from the National Labor Relations Act, because "the record here reveals that the hospital operates essentially as a nonreligious institution." Id. at 1196. Only here we can drop the qualification "essentially."

Ground 1 has no possible merit either. Kemmerer is not a political subdivision--a term, incidentally, that may be narrower than public agency. Compare 29 U.S.C. Sec. 630(b) (Age Discrimination in Employment Act), discussed in Schaefer v. Transportation Media, Inc., 859 F.2d 1251 (7th Cir.1988). The state did not create or acquire Kemmerer; it is not organized as a municipal corporation or other public entity; it is heavily subsidized by the state but if that is the criterion then every tobacco farmer in the nation is a political subdivision. Advanced thinkers revel in the ambiguities of the public-private distinction in our heavily taxed, heavily subsidized nation, but section 152(2) would be unusable if construed as an invitation to that particular dance.

Granted, it is not always clear whether one is dealing with a private agency or a political subdivision even in the rather nominalistic sense that we think appropriate in order to make the statute at least minimally definite, because agencies don't always come with the appropriate labels clearly affixed. The gas distributor held to be a political subdivision in NLRB v. Natural Gas Utility District, 402 U.S. 600, 91 S.Ct. 1746, 29 L.Ed.2d 206 (1971), could have been classified either way, but apparently what was decisive was that the power to appoint its governing board had been lodged in a public official. In Jefferson County Community Center for Developmental Disabilities, Inc. v. NLRB, 732 F.2d 122 (10th Cir.1984), a private institution for retarded and handicapped individuals was held not to be a political subdivision, even though its bylaws required that a minority of the directors be appointed from the ranks of designated public agencies. There are no public directors here. There is nothing but a state subsidy, and what is implicit in a state subsidy--that the enterprise is seeking to accomplish something that the state wants accomplished. That cannot be enough, for if it were, our subsidized farmer would be a political subdivision. As the Supreme Court has said in a related context, "That a private entity performs a function which serves the public does not make its acts state action." Rendell-Baker v. Kohn, 457 U.S. 830, 842, 102 S.Ct. 2764, 2772, 73 L.Ed.2d 418 (1982) (footnote omitted). Nor is it argued that the state's funding of Kemmerer is a subterfuge to enable the state to avoid providing an essential public service directly. Id. at 842 n. 7, 102 S.Ct. at 2772 n. 7; Spencer v. Lee, 864 F.2d 1376 (7th Cir.1989) (en banc).

Which leaves ground 2. This ground might seem to be an extension of 1, but it is not. The political subdivision exemption is designed, so far as we are able to surmise (there is no useful legislative history), to spare the states and their subdivisions the burden and...